Salesforce makes landmark deal to lease half of Transbay Tower

S.F.'s biggest tech employer to be Transbay building's anchor tenant

Updated 11:27 am, Friday, April 11, 2014

Salesforce.com will be the new anchor tenant - occupying almost half the space - of the Transbay Tower, which will be finished in 2017 and is shown here in renderings.

Salesforce.com will be the new anchor tenant - occupying almost half the space - of the Transbay Tower, which will be finished in 2017 and is shown here in renderings.

Photo: Steelblue

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The proposed Transbay Tower at First and Mission streets would include a half-acre public square on the east. Behind it is the new Transbay Terminal, set to open in 2017 with a park on the roof. The two were connected in earlier plans, but not now. less

The proposed Transbay Tower at First and Mission streets would include a half-acre public square on the east. Behind it is the new Transbay Terminal, set to open in 2017 with a park on the roof. The two were ... more

Photo: Pelli Clarke Pelli

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The proposed Transbay Tower at First and Mission streets calls for a 1,070 foot high building -- more than 200 feet taller than the Transamerica Pyramid, now San Francisco's tallest building. The top 150 feet are hollow. less

The proposed Transbay Tower at First and Mission streets calls for a 1,070 foot high building -- more than 200 feet taller than the Transamerica Pyramid, now San Francisco's tallest building. The top 150 feet ... more

Photo: Pelli Clarke Pelli

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The proposed Transbay Tower culminates in a 150-foot "crown" of metalwork that continues the tower's lattice-like frame, but encases air rather than office space.

The proposed Transbay Tower culminates in a 150-foot "crown" of metalwork that continues the tower's lattice-like frame, but encases air rather than office space.

Photo: Pelli Clarke Pelli

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An architect's model of the Transbay Tower is illuminated inside a display case at the Embarcadero Center in San Francisco, Calif. on Friday, May 17, 2013.

An architect's model of the Transbay Tower is illuminated inside a display case at the Embarcadero Center in San Francisco, Calif. on Friday, May 17, 2013.

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An architect's model of the Transbay Tower is illuminated inside a display case at the Embarcadero Center in San Francisco, Calif. on Friday, May 17, 2013.

An architect's model of the Transbay Tower is illuminated inside a display case at the Embarcadero Center in San Francisco, Calif. on Friday, May 17, 2013.

Image 8 of 17

An architect's model of the Transbay Tower is illuminated inside a display case at the Embarcadero Center in San Francisco, Calif. on Friday, May 17, 2013.

An architect's model of the Transbay Tower is illuminated inside a display case at the Embarcadero Center in San Francisco, Calif. on Friday, May 17, 2013.

Image 9 of 17

An architect's model of the Transbay Tower is illuminated inside a display case at the Embarcadero Center in San Francisco, Calif. on Friday, May 17, 2013.

An architect's model of the Transbay Tower is illuminated inside a display case at the Embarcadero Center in San Francisco, Calif. on Friday, May 17, 2013.

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A scale model of a new building at 535 Mission Street which will be in the same region as the new Transbay Tower. The model is lighted from within much like the model for the Transbay Tower will be. The artists at Gemmiti Model Art are working on the creation of a model of the new Transbay Tower in their San Francisco, Calif., offices on Monday, April 15, 2013. less

A scale model of a new building at 535 Mission Street which will be in the same region as the new Transbay Tower. The model is lighted from within much like the model for the Transbay Tower will be. The artists ... more

Image 11 of 17

Lisa Gemmitti shows a drawing of the new model of the Transbay Tower that is being made into a model. The artists at Gemmiti Model Art are working on the creation of a model of the new Transbay Tower in their San Francisco, Calif., offices on Monday, April 15, 2013. less

Lisa Gemmitti shows a drawing of the new model of the Transbay Tower that is being made into a model. The artists at Gemmiti Model Art are working on the creation of a model of the new Transbay Tower in their ... more

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Lisa Gemmitti, right, and Andy Eckers assemble the floor layers of the new model of the Transbay Tower. The artists at Gemmiti Model Art are working on the creation of a model of the new Transbay Tower in their San Francisco, Calif., offices on Monday, April 15, 2013. less

Lisa Gemmitti, right, and Andy Eckers assemble the floor layers of the new model of the Transbay Tower. The artists at Gemmiti Model Art are working on the creation of a model of the new Transbay Tower in their ... more

Image 13 of 17

Lisa Gemmitti, right, and Andy Eckers assemble the floor layers of the new model of the Transbay Tower. The artists at Gemmiti Model Art are working on the creation of a model of the new Transbay Tower in their San Francisco, Calif., offices on Monday, April 15, 2013. less

Lisa Gemmitti, right, and Andy Eckers assemble the floor layers of the new model of the Transbay Tower. The artists at Gemmiti Model Art are working on the creation of a model of the new Transbay Tower in their ... more

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The top of the new new Transbay Tower model is made of translucent acrylic that will be lighted up when the model is complete. The artists at Gemmiti Model Art are working on the creation of a model of the new Transbay Tower in their San Francisco, Calif., offices on Monday, April 15, 2013. less

The top of the new new Transbay Tower model is made of translucent acrylic that will be lighted up when the model is complete. The artists at Gemmiti Model Art are working on the creation of a model of the new ... more

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Gerald Hines (middle, at podium), founder and chairman of Hines, a privately held real estate firm talks during a ceremonial groundbreaking of the 61-story Transbay Tower in 2013.

Gerald Hines (middle, at podium), founder and chairman of Hines, a privately held real estate firm talks during a ceremonial groundbreaking of the 61-story Transbay Tower in 2013.

Photo: Liz Hafalia, The Chronicle

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The original design for theTransbay Tower, from 2007, envisioned a 1,200 foot high-rise with wind turbines in the crown.

The original design for theTransbay Tower, from 2007, envisioned a 1,200 foot high-rise with wind turbines in the crown.

Photo: Pelli Clarke Pelli, Pelli Clarke Pelli Architects

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Salesforce makes landmark deal to lease half of Transbay Tower

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Salesforce.com will lease half of the planned Transbay Tower in a landmark real estate deal that puts San Francisco's largest tech employer inside what is slated to be the city's tallest building.

Company and city officials are set to announce in a private meeting Friday that Salesforce will be the anchor tenant in Transbay Tower - now to become Salesforce Tower thanks to a naming rights agreement - when the 61-story skyscraper is completed in 2017.

The cloud-computing company will pay $560 million over 15 1/2 years to lead developer Boston Properties for 30 floors at Mission and Fremont streets.

The deal for 714,000 square feet marks the biggest corporate lease in the city in recent memory, outstripping J.P. Morgan's 650,000-square-foot site on Mission Street in 2000.

By taking over the 1.4 million-square-foot tower - set to soar more than 200 feet above the 853-foot-tall Transamerica Pyramid - Salesforce is not just staking a claim on the city's emerging skyline. It's also expanding in the South of Market neighborhood, where it already rents most of its local office space.

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The planned skyscraper is within a block of 50 Fremont, where the company already leases 500,000 square feet, and a not-yet-finished 30-story building at 350 Mission, where Salesforce plans to fill every floor by 2015. Those leases will continue even after Salesforce moves into its tower.

The three buildings - within a stone's throw of one another and the planned Transbay Transit Center - will form the base of an enormous urban corporate campus at Fremont and Mission streets.

'World-class buildings'

"What's exciting about this is we're just adding to that existing intersection," said Salesforce Chief Operating Officer George Hu. "It's amazing for us to have the opportunity to have these world-class buildings at one intersection."

Salesforce founder Marc Benioff's dreams of a San Francisco campus were once focused more than a mile away in Mission Bay, where the company hoped to build a sprawling, 2 million-square-foot facility on a 14-acre parcel. But Salesforce shelved its plans without explanation in early 2012, days before final approval by the Planning Commission. The company is in talks to sell almost 4 acres of that site to UCSF - a major beneficiary of Benioff's philanthropic largesse.

The company, founded in San Francisco in 1999, set up shop instead at 50 Fremont in 2012 - a move that "was really the catalyst to look at the intersection more strategically," Hu said.

Mayor Ed Lee said that when the company announced its first big lease downtown, Benioff pulled him aside and hinted it might not be its last.

"He did warn me and said, 'Don't be surprised if, as we expand, that all those possibilities continue to be in the same area,' " Lee said.

Salesforce workers prefer the location to Mission Bay because of nearby transportation and restaurants, the mayor said.

By 2017, when Salesforce Tower is set to open, the company plans to have doubled in size - both in leased space and in the number of San Francisco-based employees.

Already the city's biggest tech tenant, Salesforce currently leases more than 1 million square feet across the city. It plans to hold 2 million square feet when the tower is completed. The company employs 13,000 workers - 4,000 of them in the city.

Along with the real estate deal, Salesforce also announced it plans to add 1,000 San Francisco jobs in the next year.

For Lee, the blockbuster commercial lease represents a key victory in his push to move the big business closer to regional transit. The planned skyscraper sits atop the proposed Transbay Transit Center, which one day could be a hub for local, regional and statewide commuters.

Excavation at the site is now under way. When finished, Salesforce will occupy the lowest and highest floors in the building, as well as floors 3 to 30.

Anchor tenant

The city approved plans for the tower in 2012. Two years before that, then-Mayor Gavin Newsom was already envisioning Salesforce as an anchor tenant at the Transbay Tower - waxing poetic about the company's cloud logo perched atop the highest building in the city.

Under the current deal, there will be Salesforce signage, Hu said, but it will only be 100 feet above street level.

"Unfortunately," Hu said, "there will probably not be a giant cloud at the 61st floor."

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